L&T Finance net income rises over two-fold to Rs 531 crore in Q1

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L&T Finance said on Wednesday that its net income more than doubled to ₹531 crore in the April-June quarter, driven by strong loan sales along with higher margins.

The company recorded a net profit of Rs. 262 crore in the year-ago quarter.

Its net income from retail loans jumped 176 per cent year-on-year to Rs. 533 crore with constant net interest margins of 11.71 per cent from 11.57 per cent, bringing cost of credit down to 2.78 per cent.

In a statement, L&T Group said its retail portfolio jumped to 82 percent of its total loan book, up from 54 percent in the first quarter of FY23 and 75 percent in the fourth quarter of FY23.

The company attributed the rise in the retail portfolio to strong payments which jumped to Rs. 11,193 crore, an increase of 25 per cent year-on-year driven by strong growth across all retail segments.

The company, which has been burning a lot of cash several years ago in wholesale lending, was on an accelerating path to cut its wholesale book, which in the reporting period was down 65 per cent year-on-year – or up to Rs.

The quarter saw retail payments of Rs.11,193 crore, up 25 per cent from Rs.8,938 crore in Q1 FY23, taking total retail sales to Rs.64,274 crore, up 34 per cent year-on-year from Rs.47,794 crore in the year-ago period.

The company also saw marginal improvements in retail asset quality with gross NPAs declining to 3.21 percent from 3.41 percent, and net NPAS to 0.70 percent from 0.71 percent. The provision coverage ratio has also decreased to 79 percent and the capital adequacy ratio is at 25.75.

The company’s retail franchise drives its distribution presence in approximately 2 villages served by over 1,700 rural branches and over 150 branches across urban centres, serving over 89 active customers.

The microfinance company recorded its highest ever quarterly payment at Rs. 4,511 crore, a growth of 18 percent.

Agricultural Equipment Finance Payments grew by 15% to Rs 1,757 crore; Two-wheel financing grew by 14 per cent to Rs 1,726 crore and consumer loans continued to expand with payments of Rs 1,162 crore, up 15 per cent.

Housing loans and loans against property increased by 39 per cent to Rs 1,299 crore; SME loans increased almost 10 times to Rs 607 crore from Rs 68 crore in the first quarter of FY23.